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Problem 6-25B Effect of order quantity on special order decision Schmidt Company made 100,000 electric drills in batches of 1,000 units each during the prior accounting period. Normally, Schmidt markets its products through a variety of hardware stores. The following is the summarized cost to produce electric drills: $2,000,000 1,200,000 100,000 400,000 300,000 360,000 $4,360,000 Materials cost ($20.00 per unit x 100,000) Labor cost ($12.00 per unit x 100,000) Manufacturing supplies ($1.00 x 100,000) Batch-level costs (100 batches at $4,000 per batch) Product-level costs Facility-level costs Total costs Cost per unit $4,360,000 100,000 $43.60 Required a. Bypassing Schmidt's regular distribution channel, Vestavia's Home Maintenance Company has offered to buy a batch of 500 electric drills for $39 each directly from Schmidt. Schmidt's normal selling price is $54 per unit. Based on the preceding quantitative data, should Schmidt accept the special order? Support your answer with appropriate computations. Would your answer to Requirement a change if Vestavia's offered to buy a batch of 1,000 electric drills for $39 each? Support your answer with appropriate computations Describe the qualitative factors that Schmidt should consider before accepting a special order to sell electric drills to Vestavia's. b. c

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